Autumn Budget 2026: What Changes for Motorists

What the Budget changes for drivers, and when

The Budget on 28 October 2026 has four items that touch most drivers. The 5p fuel duty cut is extended until 30 June 2027. Car tax rises from 1 April 2027. Pay-per-mile tax for electric and plug-in hybrid cars is confirmed for April 2028, and VAT on public charging is clarified, not raised.

Most of it isn't law yet. "Announced" in the table means the Treasury has said it will legislate. Just one item is already in force.

Part of our guide to MOT, road tax and staying legal.

Fuel duty: the headline

Fuel duty stays at 52.95p a litre until 30 June 2027. The Treasury had planned to add 5p back from January 2027. The Budget cancels that step and extends the cut by six months. From 1 July 2027 the rate goes to 60.59p a litre for petrol and diesel.

The 52.95p rate is in force today. The stretch from 1 January to 30 June 2027 is announced, with legislation to follow. The Treasury says high fuel prices from the conflict in the Middle East are still hitting motorists. Citing government fuel price statistics, it puts diesel above £2 a litre in October 2026.

The Treasury also says its fuel duty decisions across this Parliament will have saved the average car driver £230. That's measured against the previous government's plans, using HMRC's internal calculations.

For what the rate means at the pump and the history of the cancelled rises, read our guide to the fuel duty rises of 2026-27.

Car tax (VED) goes up from 1 April 2027

Car tax rises from 1 April 2027 for most cars. The increase goes in Finance Bill 2026-27, so it's announced rather than law. The rates go up in line with RPI. For most cars registered since 1 April 2017, the standard rate goes from £200 to £210 a year.

First-year rates for new cars rise too. Four rows from the 2027-28 table:

For comparison, the 1 to 50 band is £115 in 2026-27 and the over-255 band is £5,690. The 0g/km rate stays at £10.

Older cars rise as well. Cars first registered between 1 March 2001 and 31 March 2017 are taxed by CO2 band. Band D goes from £170 to £180, band E from £200 to £210 and band K from £445 to £465. Band M, the highest, goes from £790 to £825.

Some cars see little or no change. Bands A to C stay at £20, £20 and £35. Cars registered before 1 March 2001 are taxed by engine size. Those rates go from £230 to £240 for engines of 1549cc and below, and from £375 to £390 above that.

Fuel type doesn't change the standard rate. Electric cars registered since 1 April 2025 pay the same standard rate as petrol cars, so they'll pay £210 too. For electric cars registered before that date, see do electric cars pay road tax. Most van rates and all motorcycle rates rise from the same date.

Electric and plug-in hybrid cars: pay-per-mile from April 2028

Pay-per-mile tax for electric and plug-in hybrid cars starts in April 2028. This isn't new. It was announced at Budget 2025, and this Budget confirms it. The rates are the same: 3p a mile for battery electric and hydrogen cars, and 1.5p a mile for plug-in hybrids.

The rates rise with CPI from 2029-30. The legislation goes in Finance Bill 2026-27, with a start date of 1 April 2028. HMRC expects around 5.6 million vehicles to be affected in 2028-29.

This is how you'll pay. You'll give an odometer reading and estimate your mileage for the coming tax period, usually a year. You can pay upfront on the estimate or spread it across the year. At the end of the year, a new reading triggers a reconciliation.

In pounds, a car driven 8,000 miles a year at 3p pays £240. The same mileage in a plug-in hybrid at 1.5p is £120. Those are our sums, not the Treasury's.

The Budget sets out three design commitments. A mileage estimation tool will be available at launch in April 2028. An automated refunds model is due by 2030 for cases like overestimating your mileage or selling the car.

The third is an opt-in system called eVED Connect, which the government will develop. It will let you use a car's built-in connectivity so you don't have to report mileage by hand. The July 2026 consultation response had already said the government would begin developing this opt-in.

It applies to cars only at launch. Vans, buses, coaches and HGVs are out of scope when it starts.

Public EV charging: VAT, the review and the money

There's no new tax on public charging. VAT on electricity from public charge points is already 20%, in line with petrol and diesel. That's what the independent review published with the Budget says. The Budget adds legislation to Finance Bill 2026-27 to clarify that position, taking effect from 1 November 2026.

Home charging is different. Domestic electricity is on a reduced VAT rate. In Great Britain it was cut to 0% from October 2026 for a limited period.

The Budget extends that 0% rate for a further three months, to 1 July 2027. The Treasury expects the relief to apply in Northern Ireland from April 2027.

There's money too. The Budget puts £100 million over the next two years into cutting costs at local, lower-powered public chargers, from spring 2027. The Treasury says this is expected to save the average EV driver without home charging who charges on-street around £150 a year. That estimate assumes 6.4p a mile and 8,000 miles a year.

The documents don't say how the money reaches your bill. The Department for Transport will set out next steps in due course. The funding covers Great Britain.

A taskforce will also explore letting you use your home electricity tariff at local, lower-powered public chargers. The Treasury calls it a complex proposal that will take time to consider. Nothing has been decided.

The review was led by Philip New for the Department for Transport, the Department for Energy Security and Net Zero and the Treasury. Its recommendations are the review's own, and recommendations on tax policy were outside its scope. The taskforce and the £100 million are what the government has announced in response. For the whole cost picture, see our guide to used car running costs.

If you use your own car for work

If you use your own car or van for work, the tax-free mileage rates are going up. The 55p rate for the first 10,000 business miles has applied since 6 April 2026. It was announced in May as a temporary rate. This Budget makes it permanent.

Above 10,000 business miles, the rate rises from 25p to 35p a mile from 6 April 2027. That was announced on 27 October, the day before the Budget. The legislation follows by statutory instrument later this year.

The Treasury says a basic-rate taxpayer driving 6,000 business miles will see £120 a year in extra income tax savings. At 15,000 business miles, it says the two upratings together are worth up to £300. Both figures are for 2027-28 and assume you claim Mileage Allowance Relief.

These rates are for employees and self-employed people who use their own vehicle for work. They don't apply to company cars. For what counts as a business journey, check HMRC's guidance.

For employees, they're the most an employer can pay tax-free, not a payment you get automatically. Self-employed people can use them as a flat rate for vehicle costs under simplified expenses.

Other things in the Budget a driver may hear about

A few other items appear in the Budget documents. We haven't read the detail on most of them, so each gets one line.

• A £2 cap on single bus fares in England outside London, for one year from 1 January 2027. Announced earlier; this Budget lists the funding.
• Motability reform: tax breaks restricted, and Motability Operations removing luxury vehicles from the scheme. The Budget lists this as action already taken and doesn't give a start date.
• The £1 road tax rate for most HGVs, available since July, and the 3.7p red diesel cut extended to 1 July 2027. Business only.
• The Van Benefit Charge and the Car and Van Fuel Benefit Charges rise with CPI from 6 April 2027. Company vehicles only.
• Company car tax rates for 2030-31. The zero-emission rate goes from 9% to 10%.

We found no SUV surcharge or weight-based car charge in the Budget document, the overview of tax legislation or its rates annex.

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